What can Brown Do For You? UPS Logistics Turns Brown to Gr$$n

By
Joe Francica

DM: Can we start with
a brief overview and background of UPS Logistics services and solutions
in the commercial routing and fleet management industry?Len Kennedy (LK), Vice President: UPS Logistics is a wholly owned
subsidiary of UPS Supply Chain Solutions.We have been in business since
1986; 1400 systems are out there and about 1000 companies use our product
everyday.Our product line is routing scheduling dispatching systems primarily
for people with private fleets and wholesale distribution: food service
distributions such as Sysco Food Service or US Food Service; or Pepsi Cola
and Anheiser Busch distributors.

Our products are in primarily two
areas: routing and scheduling, and wireless dispatching and tracking systems.
Probably your audience would be most interested in the MobileCast
piece: that is the dispatching and real-time tracking using GPS technology.
What that is about is fleet management.Real-time visibility is what MobileCast
helps people do.It is a combination of a backend server that a dispatcher
would use; a wireless handheld device such as Symbol or Intermec "ruggedized"
device.Alternatively, you can use a WAP phone.You don't need to have
a ruggedized device.

DM: So you separate different
components of the solution between a routing and scheduling and an "in-vehicle"
componentLK: The reason we do is that they
are focusing on two different things.The routing and scheduling creates
routes today for delivery tomorrow.It's all a planning activity.For example,
the order for products come down to a Roadnet routing system at a certain
time of day and then you develop your routes for tomorrow's delivery.The
MobileCast component allows you to manage the routes that you developed
the day before.So, they are solving two different problems

DM: Do you try to provide a perspective
client with an ROI for this type of solution?LK: Well for the routing and scheduling
solution, we conservatively quote them between 5% and 9% reduction in their
fleet operations.On the dispatching end, it is a little bit different,
because you have the aspect of real-time visibility, and you know what's
going on, but in some cases, how do you quantify being able to react quickly
to a customer delivery emergency or operation.That is sometimes tough
to quantify.

DM: Give me a perspective on the
market for your solutions.It seems like they are more focused on product
delivery as opposed to field service management.LK: We are probably an anomaly from
UPS Supply Chain Solutions since the bulk of that is providing transportation
services or warehouse management or provide service parts logistics or
emergency medical equipment; it is more service provided and third part
centric solutions.We're unusual in that we are a software company and
we provide products to the marketplace.The bulk of UPS Supply Chain Solutions
is on providing those service solutions to large companies like Boeing
and Papa Johns.

DM: And how are your software
products packaged to the user?LK: We provide them to run on our
customers own systems.For MobileCast, we provide the solution to run on
our customer's own network.

DM: Who is the typical user?LK: It is typically the dispatcher.
In some cases, it could be the President of the company or the VP or the
transportation people.Because they have visibility from a real-time standpoint,
they may be the ad hoc user.The dispatch may be using the product minute
to minute, but you have the other users that have visibility and they can
go in, have a look at it, and see how things are going.

DM: Is the interface centered
around a map? Or more tabular based?LK: Yes, some users orient themselves
in different ways.Some people want to have the map come up and show the
icons; others the tabular list.More typically, they have both of them
up there.From an operations standpoint, when I go watch what people do,
they are typically looking for the exceptions in a tabular standpoint.
The map is great, but you want to know who is behind schedule, assume everybody
else is fine, I'm going to look for the exception.

DM: What are the components in
the solution.Can you go through the "punch list" of the technologies that
are typically integrated into your solution?LK: For MobileCast, it would be
the server piece that we built from the ground up.It has a mapping component
and within that people and drag and drop things between map lists.That
is built by us.The geocoding piece we built over the course of time.Our
map databases typically come from Geographic Data Technology (GDT), although
if someone has a preferred map vendor, we can work with those as well.
With the MobileCast piece, you have a handheld computer, GPS (Garmin is
typical), and the wireless network would be Artis or the Motion Network
or Nextel data network.There are other things we run on such as Oracle
or SQL Server or Access; we are pretty agnostic when it comes to that kind
of stuff.

DM: How do you differentiate yourself
between someone like @Road, which is a totally web-based solution?LK: We consider them to be AVL (automatic
vehicle location) and certainly part of our system has that component of
vehicle location.What we provide is getting real-time visibility and tracking
what was planned, has actually happened.Because that's the strength.You
can look at an AVL and say, well, he's there or she's there, but is that
what you planned for the day? Where you behind schedule; ahead of schedule?
Should I make any changes along the way for that route? So, we know how
your routes were supposed to be, but how are they performing? So, at the
end of the day, you take you take those actual performances from your fleet
(the statistics) and push them back into the routing system.And at that
point, you get better statistics to come up with better planned delivery
times for your deliveries the next day.It is an iterative process.

DM: How do you compare to ESRI's
ArcLogistics Route or Giro?LK: We run into ArcLogistics once
in a while; not too often because we have our own vertical niches: Food
Service, Wholesale distribution, Beverage Service.I'm sure ArcLogistics
is good in certain markets, but for the ones we are in, we don't see a
whole lot of acceptance.That's not to say that we don't see them.They
are also slightly different because in who supports them.If you buy ArcLogistics,
are you supported by the VAR or supported by ESRI.Our customers want a
single point of contact.Ours is a turnkey solution.

DM: Do you have a certain threshold
of vehicles that your solution is particularly well suited or could you
take a 25-vehicle company and do virtually the same thing by scaling down
the solution?LK: Yes, we scale down.We have
people in the New York area with 25 trucks.And they like the visibility.
And, we have a customer in the New Jersey area with 841 trucks.So, it
seems to scale OK.We don't reduce any of the functionality.We assuming
that if you have a bigger fleet that the ROI would change and the pricing
would be changed.

DM: Do you see the market for
fleet logistics has seen a slow down with the reset of IT spending?LK: Yes, we have certainly seen
a slowdown.People have said to us that we like what you are showing, but
from our standpoint, we are not making any purchases just yet.We have
not lost business; just deferred.This is a highly referenced sale.Tell
me someone who has the system working; I'm going to go see them; and let
me know how it is working.And they will physically go check them out.
At the end of the day, they are going to go talk to someone in their market,
or somebody they've worked with before.That's why it is important, that
when we install something, we better get it right, because if we don't,
they are going to go back and tell someone.

DM: What is the typical scenario
for rolling out routing and scheduling solutions?LK: No one goes out and buys for
their whole operation.If you happen to have a 1000 truck operation, you
are not going to buy for 1000 trucks.Here's what you are going to do.
You're going to find one of your locations; you're going to make a pilot
project.You've got 25 trucks.You're going to put it in and see how it
works.OK, that looks good, I'm going to roll it out to the next 25 or
30.And that's what we will see.We are looking at one customer with 800
trucks, it going to take a year and one-half.They are going to grow gradually
and have checkpoints along the way.